The Supreme Court has dismissed John Kelly’s appeal against summary judgment for £378,522.76 (€480,624.76) in income tax and interest, ruling that he had available procedures to seek access to funds frozen under a proceeds-of-crime order.
The Criminal Assets Bureau had obtained judgment in the High Court for tax assessments that had become final and conclusive. Kelly appealed on two legal issues: whether the assessments fell under the tax appeal provisions in section 957(2)(a) of the Taxes Consolidation Act 1997, and whether the combined effect of tax and proceeds-of-crime laws denied him access to money needed to appeal the assessments.
On the first issue, the Supreme Court said its earlier decision in a case concerning Thomas McDonnell governed the point. It dismissed that ground of appeal.
The dispute over access to funds arose after a 1997 High Court order froze a Dublin dwelling house, a Ford Fiesta and money held in two building societies. The order had been made in separate proceedings after the court was satisfied the assets were proceeds of crime involving illicit drugs. The Bureau later assessed Kelly for tax for the years 1988–89 to 1995–96.
Kelly submitted returns through his accountant showing tax due of £106,668.98. The tax authority refused to accept his appeal against the assessments because the admitted tax had not been paid. His appeal against that refusal was listed before the Appeal Commissioners, but he did not attend; it was treated as having gone by default. The Bureau then brought proceedings to recover the assessed amount.
Kelly argued that the frozen funds prevented him from meeting the payment condition for a tax appeal, and that his constitutional rights were affected. The Supreme Court held that the High Court had considered the substance of that argument. It found Kelly had standing to raise it, but said that did not determine whether any constitutional right had been infringed.
The court concluded that Kelly could have applied under section 2(3) of the Proceeds of Crime Act 1996 to have the order varied or discharged by showing the funds were not proceeds of crime. It also held he could have sought access under section 6 for necessary expenses, which in this case could include admitted tax liabilities. The court considered there had been sufficient opportunity to pursue those procedures, including after the refusal of his tax appeal.
Because Kelly had not established that the legislation denied him access to funds to pursue an appeal, the constitutional question did not arise. The Supreme Court dismissed the appeal, leaving the High Court’s summary judgment in place.